Nursing Homes, Medicaid Rates, and Campaign Contributions

May 30, 2019

As part of its investigative series on nursing home care in Florida, Naples Daily News (part of the USA Today Network) reports that the new
Medicaid reimbursement system for Florida’s nursing homes, scheduled for full
implementation in 2023, will increase reimbursement for some of the state’s
most poorly performing facilities by millions of dollars while simultaneously
reducing reimbursement for some of the state’s best performing facilities by
millions of dollars. It reports that the
nursing home industry made large campaign contributions to state legislators to
support this new system and enjoyed “clout after contributions,” even as high
quality facilities predicted these results and opposed the changes.[1]

Naples Daily News’ analysis
shows that “53 nursing homes that averaged two stars or fewer between 2013 and
2017 are projected to receive more money, an additional $25 million combined,”
while one in four facilities with four or five stars in the federal rating
system will together lose more than $15 million. The nursing home industry contributed more
than eight million dollars over the four election cycles since 2012 and hired
26 lobbyists in nine firms to work on the legislation that changed the state’s
Medicaid reimbursement system.

Naples Daily News focuses on Consulate
Health Care, the largest nursing home chain in Florida and the sixth largest
provider in the country. Consulate was founded
in 2006 and is owned by the Atlanta-based private equity firm Formation Capital.
Its 76 Florida facilities averaged 2.4 (out
of 5) stars on Nursing Home Compare
over a recent five-year period.
Consulate contributed more than $1.3 million to state legislators “from
its corporate office, management company and individual Consulate nursing
homes” and “could see annual payment increases of more than $30 million
combined” after the new reimbursement system is implemented. One of Consulate’s facilities, Consulate
Health Care of Vero Beach, averaged 1.1 stars over the five-year period and “is
projected to receive an additional $630,000 each year under the new system.”

Consulate has had a troubled regulatory history. In December 2017, in an “unprecedented”
action,[2]
the state of Florida threatened to cancel the licenses of 55 Consulate
facilities under a state law authorizing licensure action against all
facilities in a corporation when one of its facilities faces strong regulatory
action; the state had terminated two of Consulate’s nursing home licenses. The case against the chain was settled in
April 2018 with an agreement that put eight Consulate facilities under a
two-year improvement plan.[3]

In May 2018, Naples Daily News
reported, “Consulate nursing homes are designed
to appear cash-strapped,” as the individual facilities are “essentially empty
shells, they pay rent, management and rehabilitation service fees to Consulate
or Formation Capital-affiliated companies.”[4]

The Center for Medicare Advocacy supports a public reimbursement system that is consistent with, recognizes, and supports high quality of care.[5]Naples Daily News documents the corrupting power of money that moves reimbursement policy in a contrary direction.